VAT rates and rules

VAT rates are rules

Put simply, the VAT rate is a percentage charge levied by the government on the value of goods and services. There are different VAT rates in EU countries. It may be beneficial for e-commerce to check this issue.

What about VAT rules

Each EU country must implement VAT directive in their national VAT laws. It does not mean that all EU countries have identical VAT law, but there are many principles which must be applicable for all. VAT directive can be found at EUR – Lex.

How many rates are there in the Czech Republic

In the Czech Republic there are three VAT rates (taxes):

1. the basic VAT rate is 21%
2. reduced rates of 15%
3. reduced rates of 10%.

Most often the 21% VAT is being applied.

Czech charges 10% reduced rate for

• Foodstuffs marked as essential for child nutrition
• restuarant services – food and beverages (pizza in a restaurant)
• pharmaceutical products
• books, e-books and audiobook
• household cleaning services
• hairdresser services
• bike repair services
• kids and seniors care services

Czech charges 15% VAT rate for

• Foodstuffs (excluding essential child nutrition);
• Pizza – take away
• water supplies;
• medical equipment for disabled persons;
• children’s car seats;
• public transport;
• newspapers and periodicals;
• admission to cultural events, shows and amusement parks;
• social housing;
• renovation and repair of private houses;
• cleaning of private households;
• some agricultural supplies;
• hotel accommodation;
• admission to sport events;
• use of sports facilities; social services;
• supplies to undertakers and cremation services;
• medical and dental care;

You can find details about VAT rules and rates in the Czech VAT law. The specific law is number 235/2004 Col. The basic law is updated and amended every year.

VAT definition and additional information can be found on the web of EU commission.